A payslip is a statement outlining the details of an employee’s pay during a set pay period.
A payslip is a digital or physical document detailing an employee’s payment information, including total earnings, tax deductions, and net pay for the pay period. A payslip may also include the employee's tax information, paid leave balances, and employer contributions.
Payslips allow employees to see their pay calculations and enable them to spot discrepancies and resolve any payment issues. They also serve as proof of income or employment for securing visas, housing, and bank loans.
Payslip vs. pay stub
In general, the terms payslip and pay stub are used interchangeably.
A pay stub is a more specific term commonly used in the U.S. to refer to the bottom part of a paycheck. In this case, the pay stub typically contains the same information as a payslip but is often smaller and easier to store.
Payslip vs. paycheck
The main difference between a payslip and a paycheck is that a payslip is informative, while a paycheck is transactional.
A payslip breaks down the employee's income, tax deductions, and employer contributions for a pay period.
In contrast, a paycheck is the employee’s payment for that pay period in the form of a check that the employee can deposit or cash. Employers typically include an attached payslip with the employee's paycheck for reference.
What is listed on a payslip?
The information listed on a payslip may vary depending on the company and country requirements, but a payslip typically includes the following items:
- Employee information. The employee’s name, employee ID number, pay rate, and hours worked.
- Pay period information. The pay period start date, end date, and pay date.
- Gross earnings. The total amount of money the employee earns before deductions.
- Payroll tax deductions. Deductions taken from the employee's earnings, such as for social security, retirement plans, or wage garnishments.
- Additional compensation. Overtime pay, commissions, and bonuses.
- Net pay. The take-home pay the employee receives after all deductions.
- Paid leave balance. The employee’s accrued vacation time, sick leave, and personal leave.
What is a payslip used for?
In general, a payslip functions as the basic record of an employee’s earnings for every pay period.
Payslips provide employees with a detailed breakdown of their earnings and deductions to help them understand their pay calculations. They allow employees to identify payment errors or discrepancies and ensure they receive the correct amount for their work.
Payslips provide employees with the information they need to track paycheck taxes, deductions, and employer withholdings. Employees also use payslips to support claims for government benefits, such as unemployment insurance and social security.
Employees also use payslips to verify their income for tax purposes and when applying for a mortgage, rental, or loan.
Employers can use payslips to comply with tax laws and to track employee performance and compensation.
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Are employers required to provide payslips?
Employer requirements for providing payslips vary worldwide, and payslip regulations and delivery methods may depend on an employee’s location.
For example, Mexican law requires that employers deliver pay calculations and payslips electronically through the Certificado Fiscal Digital por Internet (CFDI) to both the employee and the Servicio de Administración Tributaria (SAT).
However, U.S. federal law does not require employers to provide their employees with payslips. Instead, employers are subject to state legislation and compliance. The Fair Labor Standards Act (FLSA) does require employers to keep payroll records for each employee for at least three years and information used to calculate the wages for two years.
When in doubt, employers should provide payslips with employee paychecks to ensure accurate employee payroll records, give employees peace of mind, and maintain global payroll compliance.
